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Instacart CEO Fidji Simo Joins OpenAI as Chief of Applications

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Fidji Simo, CEO of Instacart and former head of Facebook, will join OpenAI later this year as its new Chief of Applications, according to OpenAI CEO Sam Altman. Simo will report directly to Altman, who retains his role at the top of the Microsoft-backed AI company.

Key Developments:

  • Leadership Transition: Simo will step down from her CEO role at Instacart, but will remain Chair of the Board to assist with a smooth transition. A new CEO, expected to be an internal promotion, will be announced shortly, Simo said in an email to employees.

  • New Role at OpenAI: As Chief of Applications, Simo will oversee the development of consumer-facing products, including ChatGPT, and will play a pivotal role in expanding OpenAI’s product ecosystem.

  • Board Connection: Simo joined OpenAI’s board in March 2023, shortly after Sam Altman was reinstated following a dramatic ouster and return in late 2023.

  • Instacart Performance: Simo has led Instacart since 2021, taking the company public in September 2023 and steering it to profitability. The firm recently issued an upbeat forecast, citing strong demand in online grocery delivery.

  • Tech Background: Before Instacart, Simo spent over a decade at Meta, serving as head of Facebook from 2019 to 2021, and currently sits on Shopify’s board.

OpenAI’s move to hire Simo comes just days after the company reaffirmed its nonprofit governance structure, dampening Altman’s push for more direct control while preserving investor confidence in its commercial trajectory.

OpenAI to Halve Revenue Share with Microsoft Amid Restructuring, Report Says

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OpenAI plans to significantly reduce the share of its revenue allocated to Microsoft by the end of the decade, as part of its ongoing corporate restructuring, according to a report by The Information on Tuesday. The AI firm reportedly informed investors that its revenue-sharing deal with Microsoft—currently 20% through 2030—could fall to 10% or less over the next several years.

The shift comes amid broader changes at OpenAI, which recently abandoned plans for a full conversion into a public benefit corporation (PBC) and reaffirmed nonprofit control, limiting CEO Sam Altman’s power while trying to balance mission-driven governance with commercial scalability.

The financial update shared with investors suggests a future where OpenAI is less dependent on Microsoft while still maintaining a collaborative relationship. In response to the report, OpenAI noted it is “finalizing the details of this recapitalization”, and said it continues to work closely with Microsoft. However, Microsoft declined to comment.

In January, Microsoft adjusted key terms of its deal with OpenAI, following its joint venture with Oracle and SoftBank to invest up to $500 billion in U.S.-based AI data centers—a move that signaled deeper integration of AI infrastructure beyond OpenAI’s models alone.

The current OpenAI–Microsoft partnership includes reciprocal revenue sharing agreements, access to OpenAI’s models on Microsoft’s Azure platform, and embedded use of ChatGPT within Microsoft’s enterprise software like Office and Azure AI services.

Microsoft, which has invested over $13 billion in OpenAI, is believed to be negotiating for continued access to OpenAI’s technology post-2030, as competition intensifies in the global AI race.

OpenAI Retreats from Restructuring Plan, Nonprofit Retains Control Amid Lawsuit and Public Backlash

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OpenAI has reversed course on a major restructuring plan, announcing on Monday that its nonprofit parent will retain control over its for-profit arm — a move aimed at easing growing criticism and legal pressure, including a lawsuit from co-founder Elon Musk.

In a blog post, CEO Sam Altman emphasized that OpenAI will remain under nonprofit oversight, countering a December proposal to convert the for-profit unit into a Public Benefit Corporation (PBC). That plan, which would have diluted nonprofit control in favor of capital-raising flexibility, faced strong pushback from civic leaders, regulators, and former OpenAI insiders.

“We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” said Bret Taylor, chairman of OpenAI’s board.

While the nonprofit will remain the controlling entity and a major shareholder, OpenAI still plans to proceed with uncapping investor profits and revising its for-profit structure to attract future funding. The company is also working with Microsoft, regulators, and other stakeholders to finalize equity distribution under the updated plan.

However, critics say the announcement lacks clarity. Page Hedley, a former OpenAI ethics adviser, said the nonprofit’s reduced ownership stake raises questions about whether OpenAI’s mission — ensuring artificial general intelligence (AGI) benefits all of humanity — will remain legally paramount under the revised structure.

Meanwhile, Elon Musk’s lawsuit will proceed, with his legal team dismissing the move as a cosmetic change. Attorney Marc Toberoff argued that the new structure hides how much control the nonprofit has ceded to the for-profit business.

Despite the controversy, Altman said investor confidence remains strong, and that the company can still raise up to $40 billion in new funding, including a proposed round led by SoftBank at a $300 billion valuation.

The update comes as the AI arms race intensifies, with OpenAI seeking a delicate balance between mission fidelity and capital flexibility, all while navigating legal scrutiny, ethical concerns, and internal leadership tensions.